Judgment in Managerial Decision Making

Abstract

Is your judgment influenced by personal biases? In situations requiring careful judgment, we're all influenced by our own biases to some extent. But, with Judgment in Managerial Decision Making, you can learn how to overcome those biases to make better managerial decisions. The text examines judgment in a variety of organizational contexts and provides practical strategies for changing your decision-making processes and improving these processes so that they become part of your permanent behavior. Throughout, you'll find numerous hands-on decision exercises and examples from the authors' extensive executive training experience that will help you enhance the quality of your managerial judgment. Past editions have been used in top universities, in business schools, and in public policy, psychology, and economics classes. In addition, the text has been widely recognized by practitioners in the world of behavioral finance.

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Howard Raiffa was a role model, friend, and inspiration. He transformed the field of negotiation, and he transformed my career. This brief article provides a recollection of how Howard revolutionized the field of negotiation and how those insights are now affecting broader areas of the social sciences. Howard received the 1999 Lifetime Achievement Award from the International Association for Conflict Management.

In this tribute to the 2007 recipient of the Jeffrey Z. Rubin Theory‐To‐Practice Award from the International Association for Conflict Management (IACM), we celebrate Linda Babcock's contributions to diverse lines of research, her tireless and effective efforts to put the insights of her research into practice, and at a personal level, the impact she has had on each of our lives. Innovative ideas and novel methods have been the hallmarks of Linda's research on diverse topics: the impact of self‐serving conceptions of fairness on negotiations, the labor supply behavior of cab drivers, the impact of damage caps on settlements, the propensity of men and women to initiate negotiations, and the readiness of each gender to volunteer for, and work on “nonpromotable tasks.” Linda won this award, however, not only for her path‐breaking academic research, but also for her interest in and ability to convert it into actionable initiatives. From founding the Program for Research and Outreach on Gender Equity in Society (PROGRESS), whose mission is to develop tools to teach women and girls how to harness the power of negotiation, to her leadership of the Carnegie Mellon Leadership and Negotiation Academy for Women, Linda shows how academics can play a leading role in translating theory into practice.

We study how people reconcile conflicting moral intuitions by juxtaposing two versions of classic moral problems: the trolley problem and the footbridge problem. When viewed separately, most people favor action in the former and disapprove of action in the latter, despite identical consequences. The difference is often explained in terms of the intention principle—whether the consequences are intended or incidental. Our results suggest that when the two problems are considered together, a different judgment emerges: participants reject the intention principle and embrace either the principle of utilitarianism, which favors action in both problems, or the action principle, which rejects action in both problems. In subsequent studies, we find that when required to choose between two harmful actions, people prefer the action that saves more lives, despite its being more aversive. Our findings shed light on the formation of moral judgment under normative conflict, the conditions for preference reversal, and the potential polarization of moral judgment under joint evaluation. Organizational implications are discussed.